Because Your Data Is $$

Some people have claimed that user data on Facebook is worthless (silly people). I recently wrote a post for Mashable on how Facebook could build a revenue model by essentially selling even anonymized user data. Silicon Alley Insider then posted about this same idea. Commenters to the SA post clearly didn't get that what they view as "useless" or frivolous Facebook data is in fact extremely rich and valuable trend data-- worth a lot of money to marketers, government entities, and private enterprises.

Its the value of our data that incenses me so much over the current Facebook TOS hubbub. Its not enough to say "Facebook doesn't own your data" when the license we grant them is so wholly encompassing so as to allow full usage of user data as if they did own it.

That everyone is somehow claiming victory over this because Facebook reverted to the old TOS is to completely miss the point. That license agreement is so over-arching as to dwarf any other service's TOS. Think about it.

And one more thing...I know what you're thinking, "nothing is private on the internet, so who cares?" Right? Well, consider this, Facebook data is not fragmented, unstructured data across the internet. Data in Facebook is structured, segmentable, historical, and therefore sellable. And the license agreement in both the old and the new TOS gives them the right to do so.

And lastly, Facebook, if you DO want to build a revenue model on selling user data, pay your suppliers. Users should get a cut or reward for supplying data, as outlined in this post on Mashable. You essentially could become a Vendor Relationship Management system in which we users enjoyed some kind of value exchange (beyond getting to use the Facebook service itself) for supplying you with such rich consumer data.


jefske said...

Brilliant post.
So simple and yes Facebook Data is worth something if it is properly compiled for an enterprise that could use it as insight to user's online habits.
Will be interesting to see how the next few days unfold - general press coverage wise.

natehill said...

Its not like I'd say my FB data is 'worthless'... of course it can be used for trend prediction etc. and marketing/advertising people can make $ off that. What I'm not sure I'm understanding is how my FB data can have monetary value that would be returned to me, an individual user. I don't really care if my info is used so that someone else can make $ off the fact that I think the forthcoming Lotus Plaza album is going to be great. In fact, I kinda dig that. I just don't know why I need to be concerned about this, other than understanding that by using the FB product I'm putting info out there.

Help me out here. I don't pretend to be an expert.

natehill said...

OK- read yr mashable post, and I love the idea of getting a cut every time someone uses my FB data to make $. But if that was the deal, I wonder if that would change the nature of the data people contribute to FB? The first thing I'd do is try to figure out how to basically scam the system and get a cut for all kinds of baloney that has nothing to do w/ my actual personal interests...

alisa leonard-hansen said...

@natehill, re: your second comment, you make a great point about scamming the system...that's one I hadn't thought of and you're right...I suppose though that the behavioral data that's rather implicit rather than the explicit "likes" and "interests" might be hard to scam?

re: your first comment....I suppose why this bothers me is that FB is not forthcoming about their intentions for our data. Granted, most consumers have no idea how much and how often their data is sold to government and private entities (Experian selling our data to the tune of $1 billion a year)... I suppose its the not knowing that is unnerving.

And perhaps my ideals here are a little utopian....our greatest, most powerful asset as consumers, or as people living in a commercial society is our data-- our likes, dislikes, habits, behaviors, etc. Unfortunately for us, WE are not the ones that get to capitalize on it...other do by aggregating, segmenting and supplying it to interested parties. This is the conundrum Doc Searls is trying to solve with his Vendor Relationship Management (VRM) project...

thanks for your comments, totally valid points that i don't have the answers to either.

anyone else have some thoughts on this?